In 2020, there were over 31 million small businesses in the US. While not all of those businesses will succeed, those that do will eventually want to take advantage of business audits.
A business audit is when an outside source comes in to take a look at the business’s financial statements, practices, and reporting. These professionals can offer a lot of insight into how a company can perform better, but what types of benefits does the auditing practice reveal?
Keep reading to learn what you need to know.
1. Improve Your Tax Compliance
Every year, your business is required to file taxes in the US to comply with federal law.
By auditing your financial statements, you’re actually going to put your business in a better position when tax season rolls around because you will know that there aren’t any errors that will show up in your taxes.
You’ll also be able to potentially save money on accounting fees during tax time because there is less work for the CPA to do.
2. Uncover Fraud
Although no one likes to think about it, fraud can happen in any business through various avenues, such as payroll theft, tax fraud, workers’ compensation theft, and identity theft. You have to consider getting a professional audit to make sure that these things aren’t getting missed and creating more problems for your company later on.
Audits won’t automatically find where the fraud is coming from, but they will highlight areas that you need to take a second look at. This will help you determine what is really going on and how it can be fixed to avoid problems with your business finances.
3. Get More Certifications
Certifications are good for making your business look more professional, getting new customers, and increasing profits. When you get a business audit, your business is eligible for more certifications (like the ISO 9001 certification) that it can’t obtain otherwise.
These will help your business in the long run by making sure that you are the leader in your industry.
4. Identify Bad Practices
If your business is using bad accounting practices, it’s likely because you simply don’t know what good accounting practices look like. Professionals that conduct the audits, like those at www.balancedassetsolutions.com, can help you figure out how to improve your current accounting systems so that they are more up-to-date.
This will lead to more tax breaks, higher profits, and generally better accounting internal controls.
Start Getting Business Audits Today
Whether your business is just getting started or it has been around for a few years, you should be taking advantage of regular business audits to improve your chances of success.
Not only are they great for saving you money over time, but they are also a very helpful way to find inefficiencies in how you’re currently doing things so that you can get better.
If you’re curious about what other business tips we have for you, check out the rest of our blog for other articles like this one.